Indian industry flags coal, cost and emissions hurdles to a 604 MT steel plan

what happened

According to Moody's, Indian steel industry representatives responding to the draft National Steel Policy Vision 2047 say that reaching 604 million tonnes of crude steel capacity will hinge on raw materials, energy costs and emissions cuts. The draft, issued for public consultation in October 2026, sees capacity climbing from roughly 220 million tonnes, with finished steel demand reaching 505 million tonnes by 2047.

The biggest concern is coal. India brings in about 92% of the coking coal it consumes, and that demand is expected to grow from 72 million to 236 million tonnes by 2047. Imports reached 66.33 million tonnes in FY26, and raw materials make up 65–70% of production costs, so supply shocks and price swings would quickly feed into the cost of steel for builders and machinery makers.

Emissions are another hurdle. The draft targets a cut of about 39% in emissions intensity, and around 2,550 secondary producers hold nearly 47% of capacity. Industry voices say electric arc furnaces run on renewables could help, but they need dependable round-the-clock power and workable grid access. Analysts also warn that lower intensity does not guarantee lower total CO₂: at 1.54 tonnes per tonne, about 500 million tonnes of steel would produce roughly 770 million tonnes of emissions, versus about 430 million today.

why it matters

For markets, the key question is whether India can secure inputs, contain costs and shrink its carbon footprint at the same time. Because the plan is still a draft, it has no immediate effect on prices, but it bears on long-run demand for coking coal, iron ore and steel.

market impact

Coking coal and iron ore: India's long-term import needs depend on the plan, which is still a draft.

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